Global Markets Rally as U.S.-Iran Diplomatic Talks Gain Traction

Brent crude dipped below $79 per barrel as the immediate threat of a blockade in the vital Hormuz energy corridor receded. Iranian negotiators and U.S. counterparts are now moving toward a 60-day framework for a potential deal, a timeline bolstered by oversight committees from Oman and Pakistan. Shipping activity through the waterway remains volatile, with U.S. Central Command noting 55 vessel transits on Saturday, up from 32 the day prior, even as Tehran proposed new transit fee mechanisms.

While the geopolitical temperature dropped, financial markets pivoted back to the Federal Reserve. Interest rate futures now price in a 75% probability of a rate hike by September, pushing two-year U.S. Treasury yields to their highest point since early 2025. This focus on monetary policy is compounded by political instability in the United Kingdom. Speculation surrounding Prime Minister Keir Starmer’s potential resignation and the possible succession of Andy Burnham has triggered unease in the bond market, where investors are questioning the future of British fiscal discipline.